The broader crypto industry witnessed some of the worst phases in 2022 since its emergence. Cryptocurrencies falling, companies and exchanges filing for bankruptcies, hacks and digital attacks and what not. Yet, despite the challenges the crypto space managed to accumulate the fundings and investments. But many believe the same might not going to be the case with industry this year.
Galaxy Research reported that in 2022, startups related to Web3 and crypto assets managed to receive the overall investments of more than 30 billion USD.
These numbers could be considered significant despite the odds throughout the year. And just in the previous year, the overall fundings for the space remained 31 billion USD, which was not quite far considering the fact that 2021 was relatively bullish for the crypto industry.
Alex Thorn, Firmwide Research Head, praised the year 2022 in terms of funds flow. However, with the year coming to an end, the investments in the space started declining in the third and fourth quarter. He believes that the same trend is likely to continue this year as well in expectation of macroeconomic situations and crypto market conditions witnessing an improvement.
According to Thorn, last year had about 2,900 crypto venture deals where the last quarter had the fewest of all deals and the invested capital during the time also remained lowest in the last two years. His concern is considering the trend to continue, Web3 and crypto firms in general would find it difficult to raise fundings in 2023.
Company’s value on decline in contrast to the investors’ demands getting stringent, according to Thorn, will make the entrepreneurs struggle with fundraisings.
Upcoming startup projects in crypto will be needed to concentrate on their fundamentals, operational expenses under control and likely to drive revenue this year, he added.
Another report from Crunchbase put similar indications of likelihood of venture funding getting slowed down across the sectors. From 2021, the global venture funding has fallen down by 35% till 2022. Crypto space’s maintained funding throughout the year act as a silver lining despite the odds keeping the hopes high with the market.
After attaining the all time high, global crypto market
Source: https://www.thecoinrepublic.com/2023/01/06/fundings-might-not-be-piece-of-cake-for-crypto-ventures-in-2023/